Jakarta, CNBC Indonesia – The United States (US) central bank The Federal Reserve (The Fed) approved its first interest rate hike in more than three years, Wednesday (15/3/2022) local time. The move comes amid soaring prices that increase inflation and the risks posed by Russia’s attack on Ukraine.
The Fed has kept its benchmark interest rate near zero since the start of the Covid-19 pandemic. But yesterday, the Federal Open Market Committee (FOMC) said it would raise interest rates by a quarter of a percentage point, or 25 basis points.
quote CNBC International, the rate hike was agreed with only one difference of opinion. This brings current interest rates to a range of 0.25% and 0.5%.
“We’re not going to allow high inflation to fester. The costs will be too high,” Fed Chair Jerome Powell told reporters.
He added that the FOMC is committed to using “powerful tools”. He also ensured that efforts to fight inflation did not derail the recovery from the Covid-19 pandemic even as Russia’s attack on Ukraine created new uncertainties in the economy.
In a statement, the FOMC said the impact of the war in Ukraine is likely to create additional pressure on inflation. This could also weigh on economic activity, although the implications for the US economy are highly uncertain.
Powell called supply chain problems worse and more durable than expected. He acknowledged that inflation will likely take longer to return” to the Fed’s 2% target.
The FOMC also released its economic projections for 2022. It forecasts growth to be 2.8% from 4.0% in December.
(boss / boss)
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